Ep. 53 July WASDE: Heavy Stocks Keep Pressure on 2025 Price Outlook

00;00;00;00 – 00;00;22;29
Dr. Hunter Biram
Plenty of grain still weighs on prices. Soybeans illustrate today’s demand tug of war, and acreage revisions reshuffle winners and losers. That and so much more on this episode of Morning Coffee and Ag Markets.

00;00;23;02 – 00;00;33;05
Dr. Hunter Biram
Well, I’m your host, Hunter Biram. And, today I’m going to be talking about the July WASDE with Mr. Dr. professor Scott Stiles. Scott, how are you doing?

00;00;33;08 – 00;00;34;24
Scott Stiles
Great, Hunter. Great to be with you.

00;00;34;26 – 00;00;55;11
Dr. Hunter Biram
Well, thanks for being with us. I always enjoy it whenever you come on, and you always teach me something. And I’m confident that if you’re teaching me something, someone else is learning something. So I know this is always worthwhile. So, Scott, can you, you know, just kind of give us an overview? What, you know, what do you think is, the most important thing, most important signal that you see, in this July WASDE

00;00;55;11 – 00;00;58;02
Dr. Hunter Biram
and the implications for the next few months.

00;00;58;05 – 00;01;25;18
Scott Stiles
Well, I think the market is probably trading higher yield numbers, particularly for corn. And, that’ll probably be the key change that we may start to see as soon as August. You know, it’s customary for USDA not to change their yield estimates in the July WASDE and they, you know, followed in that in that vein, this year, they kept their corn yield at 181 and beans at 52.5.

00;01;25;18 – 00;01;45;12
Scott Stiles
So both of those are record yields. But I think the trade is, is trading a higher yield number for corn in 181. And that’s, that’s, you know, part of the reason we’ve seen more pressure on the market there is that, you know, rating you know, the rating of the crop is really good. Rated 74% good to excellent.

00;01;45;15 – 00;02;06;21
Scott Stiles
That’s the highest rating for corn for this time of year since 2016. Wow. And, so I think the trade is looking at a yield number… you know, there’s a wide range, from 183, maybe up to 190 – 191, which, you know, seems really, really high. But…

00;02;06;21 – 00;02;08;17
Dr. Hunter Biram
That’s a big jump from 181 to 190.

00;02;08;22 – 00;02;29;13
Scott Stiles
Yeah. Yeah. And, so I think most are kind of in this range of 183-185 and so it’s easy, you know, the USDA did dial down production 115 million bushels for corn because of lower acres. But they could easily

00;02;29;16 – 00;02;30;23
Dr. Hunter Biram
Make that up in yield.

00;02;31;00 – 00;02;59;19
Scott Stiles
Yeah, because they had that back next month. 115 million bushels is like a 1.3 bushel yield increase. So that puts you up to 182.3. Well, you know, that’s… right now, that’s kind of at the low end of expectations, for yield estimates. So I think it’s easy to easy to replace any, you know, the production cut they made in July, in the trade’s mind.

00;02;59;21 – 00;03;06;22
Scott Stiles
But, you know, still, I mean, 181 is a record. So it’s…

00;03;06;24 – 00;03;14;19
Dr. Hunter Biram
And what’s that compared to the last, compared to the previous year? Is that up from, like, 178, 179?

00;03;14;23 – 00;03;38;13
Scott Stiles
179.3. And that was a record. So, so we’re, you know, we’re looking at back to back records. But yeah, last year was 179.3. But that’s kind of the thinking now is that, you know, you get really strong ratings, rain and outlook for the upcoming week. We are seeing above normal temperatures in the outlook for the upcoming week.

00;03;38;13 – 00;03;45;18
Scott Stiles
But when you got ample moisture, you know, probably not going to stress the…stress the crop.

00;03;45;20 – 00;03;51;09
Dr. Hunter Biram
Yeah, I think I’m seeing in the seven day forecast that the Midwest is going to get quite a bit of rain, actually, in the next seven days.

00;03;51;11 – 00;04;12;03
Scott Stiles
Yeah, this week looks wet. And, and some areas that needed rain or, you know, in the, in the outlook to get some, so. But they are looking for it to be a little, you know, pretty hot over the next week. And that may be giving a lift to the soybean market today. We did see a good bounce in soybeans today.

00;04;12;05 – 00;04;33;26
Dr. Hunter Biram
Well, let’s, let’s hit pause and we’re going to get soybeans next. But I wanted to touch based on exports. I know that I’m, you know, putting together an outlook presentation right now. And the corn exports, they are marginal increases but still increasing within these stocks projected to decline, in the current marketing year. I mean, is that something that we think will carry well into the next, to the 25-26 marketing years?

00;04;33;26 – 00;04;38;16
Dr. Hunter Biram
Is that going to have any impact on price or will production eclipse that?

00;04;38;18 – 00;05;08;04
Scott Stiles
Yeah. I mean, we’re looking at, you know, record exports for, the old crop market in the year. That 2.75 billion and that, you know, may still go higher. There’s some talk that we may eventually see 2.8 billion in the old crop year. So, record exports in the old crop. USDA is a little more conservative in the new crop year at 2.675 billions are their numbers.

00;05;08;04 – 00;05;09;28
Scott Stiles
So

00;05;10;01 – 00;05;13;05
Dr. Hunter Biram
So a little bit down, but kind of in line with where we’ve been.

00;05;13;17 – 00;05;37;18
Scott Stiles
Yeah, yeah, it’s down some and maybe it’s down, you know, due to, you know, the early optimism about, you know, the production that we’ll see out of Ukraine and in South America, and how much that they’ll have to export. But, you know, still a good number. But, down a little bit just due to, you know, more competition.

00;05;37;21 – 00;05;43;07
Dr. Hunter Biram
Yeah. Well, let’s move on to soybeans, then. What did you see in soybeans that’s, worth noting today?

00;05;43;10 – 00;06;15;19
Scott Stiles
Wasn’t much change in, you know, they kept the yield the same as we mentioned, 52.5. They dialed down harvested acres 200,000 production, down 5 million bushels. So there’s not, you know, not any sizable supply side changes. But they did increase crush by 50 million bushels up to record 2.54 million. And then offset that with lower exports and lowered exports 70 million bushels down to 1.74.

00;06;15;22 – 00;06;50;12
Scott Stiles
So record crush on the announcement. You’ve just… you know, as some background, June 13th, we got the proposed renewable volume obligations from the EPA. That proposal would increase the use of bean oil for the biomass-based diesel requirement. So, we saw, you know, so we’re seeing record crush as a result of that. So that’s, you know, one of one of the factors behind the increased crush number.

00;06;50;14 – 00;07;00;25
Scott Stiles
And then USDA looks for another record soybean crop out of Brazil. So that’s part of the reason why the exports were dialed down 70 million.

00;07;00;28 – 00;07;04;06
Dr. Hunter Biram
What does our export price look like compared to Brazil?

00;07;04;09 – 00;07;29;06
Scott Stiles
Hadn’t looked lately, Hunter, I don’t… you know, at this point, I mean, as brisk as their inspections have been, I’d say we’re still competitive. You know, there was some, you know, talk in the trade today that Brazilian exports are moving really slow, which, moving slow to the point where they may be moving large volumes of beans as their harvest starts.

00;07;29;06 – 00;07;51;23
Scott Stiles
So there’s going to be some overlap, you know, between our typical export window and, and when they’re moving some. So, you know, our prices remain competitive to this point. But you know, we may run into some trouble as we get into harvest as Brazil is moving a big record crop, 169 million ton, record crop of their own.

00;07;51;23 – 00;07;54;10
Scott Stiles
So that’s a concern at this point.

00;07;54;13 – 00;08;04;05
Dr. Hunter Biram
So help me out with the calendar, Scott, with Brazil. So does their harvest normally line up with ours, or is there like a second crop that lines up with ours?

00;08;04;07 – 00;08;36;11
Scott Stiles
They’re just the opposite, you know, just the opposite. They would start planting, you know, in the last couple of weeks of September, they plant into October, it’s a key window. But, for whatever reason, you know, it’s just that, you know, trying to move this large crop of theirs out, it’s kind of delayed. You know, their export movement, which would normally be, you know, mid year, it would be, you know, normally moving out now, but it appears that, you know, they’ll still be moving a good volume,

00;08;36;14 – 00;08;42;11
Scott Stiles
you know, a good volume of beans out in September and, you know, as our harvest is starting.

00;08;42;13 – 00;08;44;12
Dr. Hunter Biram
And is that because the crop is so big there’s…

00;08;44;14 – 00;08;57;21
Scott Stiles
I think so. Yeah. I mean it is record large. It is, you know, the 169 million tons is what USDA printed last Friday. And that is a record. Yeah. So okay. Yeah.

00;08;57;24 – 00;09;04;02
Dr. Hunter Biram
And so then what’s our price looking like for soybeans now? Has that price changed at all, or is it still looking about $10?

00;09;04;04 – 00;09;23;01
Scott Stiles
Yeah. So they dialed down $0.15 a bushel lower. $10.10 is the is the season average outlook for the 25 crop. So that’s kind of on par with last year’s. $10 was the average price for, for the 24 crop. Yeah.

00;09;23;05 – 00;09;29;00
Dr. Hunter Biram
Yeah. Right. Well what about, what about rice? Let’s move into more of our traditional southern crops.

00;09;29;03 – 00;09;58;06
Scott Stiles
Okay. Well, you know, USDA lowered acres a lot. So I think we’re working with, with an acreage number this month, it’s something like 210,000 acres below the, you know, the March perspective planting. So they did, did lower acreage quite a bit. And that translated into another big, you know, production cut for long-grain and lowered it 6.9 million hundredweight.

00;09;58;08 – 00;10;24;16
Scott Stiles
So you know, we were optimistic, I think, going into the report that, you know, we’ll see a big production cut and that might tighten, you know, tighten stocks up quite a bit. Problem is, is that USDA basically offset all of the production cut with lower demand. They lowered domestic use by 4 million hundredweight and lowered exports by 2 million hundredweight.

00;10;24;16 – 00;10;56;08
Scott Stiles
So that’s total of six. Lower, on demand. So we… the long story short, we added about 600,000 hundredweight to the, to the, to the balance sheet. So we’re sitting at, you know, 34.6 in, in the July estimate. So, we didn’t get anywhere, I guess, is what I’m trying to say, Hunter, is that we lowered production, but USDA also lowered, demand by a similar amount.

00;10;56;11 – 00;11;16;11
Dr. Hunter Biram
So anything, fundamentally, I guess, that’s driving that drop in demand? I mean, I know that with rice, it’s kind of like, it’s kind of like with wheat. I mean, those are crops that quality plays into that a lot. I mean, is there any way to tell, you know, what might be driving demand despite these low prices and these competitive prices?

00;11;16;13 – 00;11;43;24
Scott Stiles
Well, you know, I mean, it’s normal to see, you know, lower production. You know, you see some offset, you know, some lower demand. I think you can attribute, you know, a lot of the lower exports to the U.S just not being price competitive, particularly with Asian origins. They you know, the average price on the Asian milled rice at around $400 a metric ton, U.S is sitting around $650 at this point.

00;11;43;24 – 00;12;12;27
Scott Stiles
So there’s a huge difference in price there. The South American rice, which competes more in our rough rice markets is discounted to the U.S. as well. I’m not sure if it’s quite $100 a ton discount, but it is, it is discounted some to the U.S. So there’s this huge you know, there’s huge price disparity with Asia in particular that hurts us on exports. Mill use,

00;12;12;29 – 00;12;35;13
Scott Stiles
not sure of the story, you know, why they would drop mill, the domestic use by 4 million this month. But 133 is on, it’s the same as the 24 crop year. It’s on par with a year ago. It’s still, I mean, it’s it’s a big number again, that was, I think that that was kind of a surprise to see that much,

00;12;35;15 – 00;12;37;21
Scott Stiles
that much cut in total demand.

00;12;37;24 – 00;12;59;00
Dr. Hunter Biram
Yeah. So, you know, with what time that we have left, let’s, you know, talk about cotton. So, you know, we had more harvested area, production, ending stocks, even with, you know, a lower yield. So what do you think? What factors do you think were driving those movements and what should we be on the lookout for?

00;12;59;02 – 00;13;29;01
Scott Stiles
I think that surprised everybody in the in the trade to see this month. You know, USDA added, I think, a little over 250,000 on planted acres, and then they added 470,000 on harvested acres. So now part of that, you know, on the harvested acres is additionally using the lower abandonment rate, like last year and the year before, I think we had abandonment of 30% or so.

00;13;29;03 – 00;13;59;19
Scott Stiles
And then this year, I think 14% abandonment. So what that means is that, you know […] you’re going to harvest a higher percentage of the acres. And so typically, you know, you got, you know, a key production areas of Texas that are really dry. Last few years they have been. But this year, if you look at the Drought Monitor, it’s just, you know, it’s blank, if you will, if you look at the High Plains area, so. That area is, you know, moisture wise, is in good shape.

00;13;59;21 – 00;14;24;14
Scott Stiles
And then across the U.S., I think 3% of the cotton production is in drought right now. So historically, that’s really a low number. They did lower the yield outlooks. But it’s just because that, you know, you’re looking at harvest in a higher number of acres in a non irrigated part of the country, which is the south, southwest region.

00;14;24;17 – 00;14;50;01
Scott Stiles
Anyway. Crop prospects are pretty good right now in the southwest region which is the bulk of our acres, 62% of our upland acres are in that southwest region. Outlook looks good. And so the USDA added 600,000 bales of production this month just on, you know, it’s just really a good crop conditions, you know, certainly good, good soil moisture conditions.

00;14;50;01 – 00;15;20;02
Scott Stiles
And in a key area. Beginning stocks were lowered some. So half of that production increase was offset with a 300,000 drought and beginning stock. So we added 300,000 bales to the ending stocks, leaves us at 4.6. So that’s… it’s historically pretty heavy. I think the highest stock since the ‘22 marketing year and USDA didn’t change their price outlook. They kept it at $0.62.

00;15;20;05 – 00;15;23;14
Dr. Hunter Biram
$0.62. It’s hard to do a whole lot with $0.62.

00;15;23;16 – 00;15;37;26
Scott Stiles
Yeah. We’re… we were talking about earlier about prospects for PLC payments. And at that price level and you know, that’s what we’re counting on to fill the, fill the void, Hunter. Yeah.

00;15;37;29 – 00;15;57;06
Dr. Hunter Biram
And that may be… that’s, I mean, that’s going to be what it will fill in. I mean, you got this disaster relief payments that we talked about last week. Got this updated farm safety net that’s authorized through ‘31, 2031 in the Big Beautiful Bill. And you know, that’s but I mean, when you’re at the mercy of the market, you know, there’s only so much you can do on the yield front.

00;15;57;06 – 00;16;11;13
Dr. Hunter Biram
And then you just got to pray for good weather. And hey, we got good weather. There’s no doubt about that. But now we’re looking at, you know, prices that just, you just can’t do anything with. I mean I’ve, you know, I’ve talked to farmers before. They say that they get nervous and there’s eight in front of it.

00;16;11;13 – 00;16;20;25
Dr. Hunter Biram
So let alone a six in front of that price. So, so anyway, any, any last thoughts, Scott? Before we sign off here.

00;16;20;27 – 00;16;43;06
Scott Stiles
Yeah. Just say that, you know, the next WASDE is coming up, August 12th and USDA will use, you know, survey based information to make any adjustments to yields that they need to. So they’ll be looking at, you know, doing some grower, do grower surveys. They also look at, you know, satellite imagery and vegetative health of the crop.

00;16;43;06 – 00;16;53;03
Scott Stiles
And so we’ll see some possibly some different yield estimates as soon as the August report. So that’s, that’s coming up August 12th.

00;16;53;06 – 00;17;10;13
Dr. Hunter Biram
All right. Well y’all heard it here. Be on the lookout for that August 12th report. We will do coverage on it. So we will have an episode on it. And are there any crop tours that we should be aware of? I know that normally the markets are paying attention to those, you know, the Pro Farmer Crop Tour and, is there any others?

00;17;10;16 – 00;17;21;04
Scott Stiles
That should be coming up soon. The Pro Farmer will be, be one that the market follows closely. That is coming up August 18th through 21st.

00;17;21;07 – 00;17;33;25
Dr. Hunter Biram
Okay. We will be covering all of this and more, trying to help everyone stay abreast of what’s happening, and shift in the markets. And with that, Scott, as always, greatly appreciate your time and appreciate all your expertise.

00;17;34;00 – 00;17;35;03
Scott Stiles
Enjoyed it, Hunter. Thank you.

00;17;35;08 – 00;17;37;27
Dr. Hunter Biram
All right, now y’all stay tuned for the market report. Thanks.

00;17;38;09 – 00;18;00;05
Evan Ware
Thanks for sticking around for your market report. This is Evan Ware, I know an unfamiliar voice to our listeners. I’m normally behind the scenes editing the podcast, but today both Hunter and Ryan are on the road. We’ll start with September 2025 corn futures at $4.02 per bushel. That’s down $0.22 from a month ago and up $0.11 from a year ago.

00;18;00;08 – 00;18;33;02
Evan Ware
Rice September 2025 futures, $12.52 per hundredweight. That’s down $1.21 from a month ago, and down $1.77 from a year ago. Soybeans November 2025 futures at $10.27 a bushel. That’s down $0.41 from a month ago and down $0.16 from a year ago. Cotton December 2025 futures at $0.69 per pound. That’s up $0.01 from a month ago and down $0.03 from a year ago.

00;18;33;04 – 00;19;04;06
Evan Ware
Wheat July 2026 futures, $5.91 per bushel. That’s up $0.42 from a month ago and down $0.07 from a year ago. For peanuts, the U.S. weekly average, $558 per ton. That’s up $20 from a month ago and also up $20 from a year ago. Arkansas Highway Diesel currently at $3.38. A month ago, it was at $3.23. And a year ago, at $3.52.

00;19;04;08 – 00;19;50;15
Evan Ware
Arkansas Farm diesel, currently at $2.71 a month ago, was $2.76. And a year ago, at $2.74. For fertilizer, we have urea currently at $558 per ton. A month ago, that was at $575 a ton, and three months ago at $548 a ton. Ammonium nitrate is at $398 a ton. A month ago, it was at $414 a ton. And three months ago, at $480 a ton. Ammonium sulfate, currently at $540 a ton. A month ago, was the same at $540 a ton, and three months ago was at $541 a ton.

00;19;50;23 – 00;20;22;17
Evan Ware
DAP currently at $828, a month ago $810, and three months ago, $762 a ton. Triple super phosphate is currently at $715 a ton. A month ago it was $675 a ton, and three months ago was $686 a ton. Potash is currently at $450 a ton. A month ago, it was at $440 a ton, and three months ago it was at $449 a ton.

00;20;22;22 – 00;20;56;22
Evan Ware
Mississippi River levels at Memphis. The current reading is 7.42ft. A year ago we were at 15.36ft. And that’s it for our market report. Thank you so much for tuning in to another episode of Morning Coffee and Ag Markets. Hope you all have a great week. Thanks.